Monday Market Commentary: Mortgage Rates Slightly Worse as Fed Highlights Inflation Concerns

by Alex Stenback on May 14, 2007

                                                                      Graphic Courtesy MSNBC

Last Week:
The mortgage bond markets softened somewhat, (though rates mostly held their ground) after the Fed once again underscored its concerns about inflation via the FOMC statement.  In other words, the Fed has told the markets that a rate cut won’t be forthcoming until there is strong evidence that inflation is no longer a threat.
This Week:
The Fed is clearly taking its cues from inflation data.  Accordingly, Tuesday’s Consumer Price Index (CPI) will get the bulk of the markets attention this week, as it should.  A tame CPI number may open the door for a move lower in mortgage rates.  If CPI comes in "hot" (shows higher than expected levels of inflation) we can expect rates to bounce up quickly.  A very full calendar otherwise, posted below.

View This Week’s Economic Calendar After the Jump


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